Rule 57CC valuation must track the final product manufactured, not the downstream product's value.

Rule 57CC was applied to the final product manufactured using the relevant input, not to a subsequent end product derived from captively consumed castings. Because the relevant final product in the process was the casting, a demand computed at 8% of the value of the PD pumps was not sustainable. The Tribunal also noted that the point was already covered by its earlier decision, and the demand was therefore held unsustainable in favour of the assessee.

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Issues: Whether the amount payable under Rule 57CC could be computed with reference to the value of the final product manufactured from the captively consumed castings, or whether it had to be linked to the value of the castings themselves.

Analysis: The appellants had taken Modvat credit on inputs used in the manufacture of castings, part of which were captively consumed and exempt from duty. Rule 57CC applies to the value of the final product manufactured using the input in question. Since the final product in the relevant process was the casting and not the PD pumps, the demand based on 8% of the value of the PD pumps was not sustainable. The issue was also covered by the Tribunal's earlier decision.

Conclusion: The demand was held to be unsustainable and the issue was decided in favour of the assessee.

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